q4 ’18 earnings all

JANUARY 29, 2019

Q4 ’18 EARNINGS CALL

2

Provided January 29, 2019, as part of an oral presentation and is qualified

by such, contains forward-looking statements, actual results may vary

materially; Amgen disclaims any duty to update.

SAFE HARBOR STATEMENTThis presentation contains forward-looking statements that are based on management’s current expectations and beliefs and are subject to a number of risks, uncertainties and assumptionsthat could cause actual results to differ materially from those described. All statements, other than statements of historical fact, are statements that could be deemed forward-lookingstatements, including statements about estimates of revenues, operating margins, capital expenditures, cash, other financial metrics, expected legal, arbitration, political, regulatory or clinicalresults or practices, customer and prescriber patterns or practices, reimbursement activities and outcomes and other such estimates and results. Forward-looking statements involvesignificant risks and uncertainties, including those discussed below and more fully described in the Securities and Exchange Commission (SEC) reports filed by Amgen, including Amgen’smost recent annual report on Form 10-K and any subsequent periodic reports on Form 10-Q and current reports on Form 8-K. Please refer to Amgen’s most recent Forms 10-K, 10-Q and 8-K foradditional information on the uncertainties and risk factors related to our business. Unless otherwise noted, Amgen is providing this information as of January 29, 2019 and expressly disclaimsany duty to update information contained in this presentation.

No forward-looking statement can be guaranteed and actual results may differ materially from those we project. Our results may be affected by our ability to successfully market both new andexisting products domestically and internationally, clinical and regulatory developments involving current and future products, sales growth of recently launched products, competition fromother products including biosimilars, difficulties or delays in manufacturing our products and global economic conditions. In addition, sales of our products are affected by pricing pressure,political and public scrutiny and reimbursement policies imposed by third-party payers, including governments, private insurance plans and managed care providers and may be affected byregulatory, clinical and guideline developments and domestic and international trends toward managed care and healthcare cost containment. Furthermore, our research, testing, pricing,marketing and other operations are subject to extensive regulation by domestic and foreign government regulatory authorities. We or others could identify safety, side effects or manufacturingproblems with our products, including our devices, after they are on the market. Our business may be impacted by government investigations, litigation and product liability claims. In addition,our business may be impacted by the adoption of new tax legislation or exposure to additional tax liabilities. While we routinely obtain patents for our products and technology, the protectionoffered by our patents and patent applications may be challenged, invalidated or circumvented by our competitors, or we may fail to prevail in present and future intellectual property litigation.We perform a substantial amount of our commercial manufacturing activities at a few key facilities, including in Puerto Rico, and also depend on third parties for a portion of our manufacturingactivities, and limits on supply may constrain sales of certain of our current products and product candidate development. We rely on collaborations with third parties for the development ofsome of our product candidates and for the commercialization and sales of some of our commercial products. In addition, we compete with other companies with respect to many of ourmarketed products as well as for the discovery and development of new products. Discovery or identification of new product candidates or development of new indications for existing productscannot be guaranteed and movement from concept to product is uncertain; consequently, there can be no guarantee that any particular product candidate or development of a new indicationfor an existing product will be successful and become a commercial product. Further, some raw materials, medical devices and component parts for our products are supplied by sole third-party suppliers. Certain of our distributors, customers and payers have substantial purchasing leverage in their dealings with us. The discovery of significant problems with a product similar toone of our products that implicate an entire class of products could have a material adverse effect on sales of the affected products and on our business and results of operations. Our efforts toacquire other companies or products and to integrate the operations of companies we have acquired may not be successful. A breakdown, cyberattack or information security breach couldcompromise the confidentiality, integrity and availability of our systems and our data. Our stock price is volatile and may be affected by a number of events. Our business performance couldaffect or limit the ability of our Board of Directors to declare a dividend or our ability to pay a dividend or repurchase our common stock. We may not be able to access the capital and creditmarkets on terms that are favorable to us, or at all.

This presentation includes GAAP and non-GAAP financial measures. In accordance with the requirements of SEC Regulation G, reconciliations between these two measures, if these slides arein hard copy, accompany the hard copy presentation or, if these slides are delivered electronically, are available on the Company's website at www.amgen.com within the Investors section.

3




AGENDA

Introduction Arvind Sood

Opening Remarks Bob Bradway

Q4 ’18 and FY ’18 Business Results David Meline

Global Commercial Review Murdo Gordon

R&D Review David Reese

Q&A All

4




• We met and exceeded each of our 2018 financial commitments

• Our transformation over the past five years positions us well to deliver

important medicines for patients and long-term growth for shareholders

• Our newer products are demonstrating momentum

• Our R&D organization is delivering differentiated, first-in-class programs

• With a strong balance sheet and sustained cash flows, we are in a strong

position to provide attractive returns to our shareholders

INVESTING FOR LONG-TERM GROWTH

EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER

DAVID MELINE

Q4 ’18 AND FY ’18 BUSINESS RESULTS

6




2018 Commitments Result Outcome

Double-digit EPS* growth** 14%

$1.5B gross cost savings since 2013 $1.9B

Operating margin* of 52%–54% vs. 38% in 2013 53%

Reduce our facility footprint by 23% 24%

Return of ~ 60% of net income* to shareholders† 89%

WE MET AND EXCEEDED OUR LONG-TERM FINANCIAL COMMITMENTS FOR 2018 AIDED BY OUR SUCCESSFUL TRANSFORMATION PROGRAM

*Non-GAAP financial measure—if this slide is in hard copy, see reconciliations accompanying the presentation, or if this slide is delivered electronically, see reconciliations available at: www.amgen.com

within the Investors section; **On average, between 2013–2018; †On average, between 2014–2018

+

+

+

+

+

7




NON-GAAP EPS INCREASED 18% IN Q4 2018$ Millions, Except Non-GAAP EPS

All income statement items for Q4 ’18 and/or Q4 ’17, except revenue, other income/(expense) and average shares, are non-GAAP financial measures—if this slide is in hard copy, see

reconciliations accompanying the presentation, or if this slide is delivered electronically, see reconciliations available at: www.amgen.com within the Investors section

Item Q4 ’18 Q4 ’17 B/(W) %Revenue

Product Sales

Other Revenues

$6,230 6,001

229

$5,8025,569

233

7%8%

Non-GAAP Operating Expenses 3,513 3,247 (8)%

Cost of Sales % of product sales 819 13.6% 816 14.7%

R&D % of product sales 1,162 19.4% 1,025 18.4%

SG&A % of product sales 1,532 25.5% 1,406 25.2%

Non-GAAP Operating Income % of product sales 2,717 45.3% 2,555 45.9% 6%

Other Income/(Expense) (197) (31)

Non-GAAP Net Income $2,186 $2,104 4%

Non-GAAP EPS $3.42 $2.89 18%

Average Shares (millions) 640 729 12%

Non-GAAP Tax Rate 13.3% 16.6% 3.3 pts

8




NON-GAAP EPS INCREASED 14% IN 2018$ Millions, Except Non-GAAP EPS

All income statement items for FY ’18 and/or FY ’17, except revenue and average shares, are non-GAAP financial measures—if this slide is in hard copy, see reconciliations

accompanying the presentation, or if this slide is delivered electronically, see reconciliations available at: www.amgen.com within the Investors section

Item FY ’18 FY ’17 B/(W) %Revenue

Product Sales

Other Revenues

$23,74722,533

1,214

$22,84921,795

1,054

4%3%

Non-GAAP Operating Expenses 11,890 11,191 (6)%

Cost of Sales % of product sales 3,001 13.3% 2,943 13.5%

R&D % of product sales 3,657 16.2% 3,482 16.0%

SG&A % of product sales 5,232 23.2% 4,766 21.9%

Non-GAAP Operating Income % of product sales 11,857 52.6% 11,658 53.5% 2%

Other Income/(Expense) (786) (376)

Non-GAAP Net Income $9,573 $9,246 4%

Non-GAAP EPS $14.40 $12.58 14%

Average Shares (millions) 665 735 10%

Non-GAAP Tax Rate 13.5% 18.0% 4.5 pts

9




FREE CASH FLOW WAS $10.6B IN 2018

$ Billions

Cash Flow Data FY ’18 FY ’17

Capital Expenditures $0.7 $0.7

Free Cash Flow* 10.6 10.5

Share Repurchase 17.9 3.1

Dividends Paid 3.5 3.4

Balance Sheet Data FY ’18 FY ’17

Cash and Investments 29.3 41.7

Debt Outstanding 33.9 35.3*Non-GAAP financial measure—if this slide is in hard copy, see reconciliations accompanying the presentation, or if this slide is delivered electronically,

see reconciliations available at: www.amgen.com within the Investors section

10




2019 GUIDANCE

*Non-GAAP financial measure—if this slide is in hard copy, see reconciliations accompanying the presentation, or if this slide is delivered electronically, or

amounts pertain to previously issued financial guidance, see reconciliations available at: www.amgen.com within the Investors section

Guidance

Revenue $21.8B–$22.9B

Non-GAAP EPS* $13.10–$14.30

Non-GAAP Tax Rate* 14.0%–15.0%

Capital Expenditures ~ $700M

EXECUTIVE VICE PRESIDENT,GLOBAL COMMERCIAL OPERATIONS

MURDO GORDON

GLOBAL COMMERCIAL REVIEW

12




Q4 ’18 Q4 ’17 YoY r

U.S. ROW Total Total Total

Repatha® $104 $55 $159 $98 62%

BLINCYTO® 37 26 63 46 37%

XGEVA® 344 112 456 391 17%

Prolia® 430 225 655 574 14%

KYPROLIS® 153 98 251 227 11%

Nplate® 112 70 182 165 10%

Sensipar®/Mimpara® 367 81 448 413 8%

Vectibix® 74 94 168 159 6%

Neulasta® 1,012 157 1,169 1,114 5%

Parsabiv® 108 12 120 3 NM

Aimovig® 95 0 95 0 NM

Biosimilars* 0 34 34 0 NM

EPOGEN® 264 0 264 270 (2%)

Aranesp® 228 246 474 491 (3%)

Enbrel® 1,263 52 1,315 1,423 (8%)

NEUPOGEN® 43 32 75 126 (40%)

Other** 21 52 73 69 6%

Total Product Sales $4,655 $1,346 $6,001 $5,569 8%

Total Revenues $6,230 $5,802 7%

Q4 ’18 GLOBAL COMMERCIAL REVIEW

$ Millions, Net Sales

NM = not meaningful

*Biosimilars includes KANJINTI™ and AMGEVITA™; KANJINTI™ trade name provisionally approved by the U.S. Food and Drug Administration

**Other includes Bergamo, MN Pharma, IMLYGIC® and Corlanor®

13





Q4 ’18 PRODUCT SALES

*Non-GAAP financial measure—if this slide is in hard copy, see reconciliations accompanying the presentation, or if this slide is delivered electronically, see reconciliations available at: www.amgen.com within the Investors section

Note: Inventory represents wholesaler and, based on prescription data for Enbrel®, end-user inventories; †Includes Vectibix®, Nplate®, XGEVA®, KYPROLIS®, BLINCYTO® and IMLYGIC®

4,353 4,147 4,367 4,260 4,655

1,216 1,1961,312 1,250

1,346

Q4 ’17

5,679

Q2 ’18Q1 ’18 Q3 ’18

5,569

Q4 ’18

5,343

6,0015,510

Q4 ’18 YoY QoQ

Total Growth 8% 9%

Units 10% 7%

Inventory 1% 2%U.S.

ROW

FY 2018 Highlights• Strong unit volume growth

• Launched two products in the U.S., Aimovig®

for the prevention of migraine and Parsabiv®

for secondary hyperparathyroidism

• Hematology/Oncology† portfolio grew 14%

• Launched our first biosimilars―KANJINTI™

and AMGEVITA™ outside the U.S.

• For the full year, international sales grew 10%,

excluding the impact of foreign exchange*,

driven by 14% volume growth

14




Highlights

Q4 ’18 REPATHA® SALES GREW 62% YOY

7084

9872

104

28

39

50

48

55

Q3 ’18Q1 ’18 Q2 ’18Q4 ’17 Q4 ’18

98

123

148

120

159

Q4 ’18 YoY QoQ

Total Growth 62% 33%

Units 91% 21%

Inventory 6% 3%


U.S.

ROW

*Net selling price represents the impact of list price changes as well as contracting and access changes

Note: Inventory represents wholesaler inventories

• YoY double-digit growth driven

primarily by unit volume, offset partially

by lower net selling price*

• New lower list price option represents

over 25% of all units exiting Q4, but

only 43% of Medicare lives covered to

date

• Blended net price in the U.S. will

decline, but expect higher unit volume

and net sales growth in longer term

15




Q4 ’18 YoY QoQ

Total Growth 14% 23%

Units 12% 17%

Inventory 0% 5%


Q4 ’18 PROLIA® SALES GREW 14% YOY

369 320396 354

430

205174

214178

225532

494

Q4 ’17

574610

Q2 ’18Q1 ’18 Q3 ’18

655

Q4 ’18

U.S.

ROW


Highlights

• Double-digit unit volume growth

across geographies

• QoQ growth in Q4 follows typical

Prolia® pattern

http://www.google.com/imgres?imgurl=http://2.bp.blogspot.com/_dru4adsP4q0/StysNhs1zAI/AAAAAAAADU0/i7jfT8OB25k/s400/prolia.gif&imgrefurl=http://invivoblog.blogspot.com/2009_10_01_archive.html&usg=__lkiIaPHU3RqT3E0XwF1MsMK6sG0=&h=97&w=179&sz=6&hl=en&start=1&um=1&itbs=1&tbnid=a7M4JQs2JBd9tM:&tbnh=55&tbnw=101&prev=/images?q=prolia&um=1&hl=en&sa=N&rls=com.microsoft:*&tbs=isch:1

16





Q4 ’18 HEMATOLOGY/ONCOLOGY* SALES GREW 13% YOY

637 696 710 689 730

363380 431 408 403

Q4 ’17

1,000

Q4 ’18Q1 ’18 Q2 ’18

1,141

Q3 ’18

1,076 1,097 1,133

Q4 ’18 YoY QoQ

Total Growth 13% 3%

Units 13% 2%

Inventory 0% 1%U.S.

ROW

*Includes Vectibix®, Nplate®, XGEVA®, KYPROLIS®, BLINCYTO® and IMLYGIC®


• Double-digit growth driven by unit

volume growth

• Hematology/Oncology portfolio

expected to be a growth engine for

the future

• Portfolio will benefit from addition of

other innovative products and

biosimilars over time

Highlights

17





Q4 ’18 XGEVA® SALES GREW 17% YOY

285332 339 323 344

106

113 113110

112

456

Q3 ’18Q4 ’17 Q2 ’18Q1 ’18 Q4 ’18

391

445 452433

Q4 ’18 YoY QoQ

Total Growth 17% 5%

Units 12% 3%

Inventory 1% 2%U.S.

ROW


Highlights

• YoY growth driven primarily by

unit volume growth

– ~ 60% unit share in the U.S.

• Continued steady share growth in

multiple myeloma segment, which was

added to our label in 2018

18





Q4 ’18 KYPROLIS® SALES GREW 11% YOY

150 137 151 142 153

7785

11290

98

227

Q4 ’17

263

Q1 ’18

222

Q2 ’18 Q4 ’18Q3 ’18

232251

Q4 ’18 YoY QoQ

Total Growth 11% 8%

Units 17% 7%

Inventory (1%) 1%U.S.

ROW

Highlights

• Strong unit volume growth YoY driven

primarily by ex-U.S. business, offset

partially by net selling price*

• Continue to see new patient share

gradually increasing

• Once-weekly dosing option based on

ARROW study helps with patient

convenience



19





Q4 ’18 NEULASTA® SALES GREW 5% YOY

969 1,009 948 8971,012

145 146152

154157

1,100

Q4 ’17 Q1 ’18

1,114

Q3 ’18Q2 ’18

1,155

Q4 ’18

1,051

1,169

Q4 ’18 YoY QoQ

Total Growth 5% 11%

Units 9% 8%

Inventory 1% 1%U.S.

ROW

Highlights• In Q4, YoY sales increased due to

$55M purchase from the U.S. Biomedical Advanced Research and Development Authority

• Neulasta® Onpro® exited Q4 ’18 with over 60% of U.S. Neulasta® units sold

• Competitive landscape changing with two biosimilars approved in 2018 in the U.S. and recent competitive launches in Europe

• Additional competitors could emerge in 2019 globally


20





Q4 ’18 NEUPOGEN® SALES DECLINED 40% YOY

8265 63

52 43

44

38 39

3332

102103

Q4 ’17

126

Q1 ’18 Q2 ’18 Q3 ’18 Q4 ’18

8575


Q4 ’18 YoY QoQ

Total Growth (40%) (12%)

Units (11%) 18%

Inventory (1%) (1%)U.S.

ROW

Highlights

• Exited Q4 with roughly one-third

unit share of short-acting segment in

the U.S.

21




$ Millions, Net Sales Highlights

Q4 ’18 ENBREL® SALES DECLINED 8% YOY

1,368

1,050

1,252 1,242 1,263

Q1 ’18

55

Q4 ’17

55

50

Q3 ’18

50

Q2 ’18

52

Q4 ’18

1,423

1,105

1,302 1,292 1,315

Q4 ’18 YoY QoQ

Total Growth (8%) 2%

Units (4%) 0%

Inventory 2% 5%U.S.

ROW


Note: Inventory represents wholesaler and, based on prescription data, end-user inventories

• YoY decline driven primarily by unit

volume and net selling price* declines

• Q1 ’19 as a percentage of full-year

sales should be similar to Q1 ’18

22





Q4 ’18 EPOGEN® SALES DECLINED 2% YOY

270244 250 252

264

Q4 ’18Q4 ’17 Q3 ’18Q1 ’18 Q2 ’18



U.S.

Q4 ’18 YoY QoQ

Total Growth (2%) 5%

Units 7% 8%

Inventory (3%) (1%)

Highlights

• YoY sales decline driven by lower net

selling price*, offset partially by higher

unit demand

• Emerging competition from recently

approved short-acting biosimilar in

2018

• Net selling price* declines to increase

in 2019 due to extended supply

agreement with DaVita and biosimilar

competition

23





Q4 ’18 ARANESP® SALES DECLINED 3% YOY

263 225 241 248 228

228229 231 229 246

491

Q4 ’17

472

Q3 ’18 Q4 ’18Q1 ’18 Q2 ’18

477454

474

Q4 ’18 YoY QoQ

Total Growth (3%) (1%)

Units 0% 5%

Inventory (2%) (1%)U.S.

ROW

Highlights

• YoY decline driven primarily by

unfavorable changes in inventory and

lower net selling price*

• Emerging competition from recently

approved short-acting biosimilar

• We expect sales to decline at a faster

rate in 2019 due to both long-acting and

short-acting competition



24




FY 2018 Worldwide Business

$2.9B, (8%) YoY

EPOGEN®

$1.0B, (8%) YoY

Dialysis

$1.0B

FULL YEAR 2018 ESA BREAKDOWN

DaVita Fresenius Other

Aranesp®

$1.9B, (9%) YoY

Ex-U.S.

$0.9B, 0% YoY

Oncology

$0.3B,

(3%) YoY

U.S.

$0.9B, (15%) YoY

Nephrology

Dialysis

$0.3B,

(32%) YoY

Nephrology

Hospital

$0.4B,

(9%) YoY

Oncology

$0.3B,

1% YoY

Nephrology

$0.6B,

(1%) YoY

72%6%

22%

ESA = erythropoiesis-stimulating agent

Totals may not add due to rounding

25





U.S.

ROW

36

66

92108

12

10

Q4 ’17

5

7

Q1 ’18 Q2 ’18 Q3 ’18 Q4 ’18

3

41

73

102

120

Q4 ’18 PARSABIV® SALES CONTINUED ON A SOLID TRAJECTORY

Q4 ’18 YoY QoQ

Total Growth NM 18%

Units NM 33%

Inventory NM 1%

• Strong utilization at independent and

midsize dialysis providers

• Large dialysis organizations continue

to increase adoption gradually and are

expected to be majority of future

growth


26





Q4 ’18 SENSIPAR® SALES GREW 8% YOY

322409

330 330 367

91

88

90 7981

413

Q4 ’17 Q1 ’18 Q2 ’18

497

Q3 ’18 Q4 ’18

420 409448

Q4 ’18 YoY QoQ

Total Growth 8% 10%

Units (7%) (4%)

Inventory 3% (1%)U.S.

ROW


Note: Inventory represents wholesaler and, based on prescription data, end-user inventories through Q4 ’17; Represents wholesaler inventory only beginning in Q1 ’18

• YoY increase driven by favorable prior

period accounting estimates and

higher net selling price*, offset

partially by volume declines due to

adoption of Parsabiv®

• Outlook remains uncertain given

ongoing litigation

• 2019 guidance reflects a wide range of

possible outcomes

27




Highlights

Q4 ’18 AIMOVIG® SALES POINT TO A STRONG LAUNCH

22

95

Q2 ’18 Q3 ’18 Q4 ’18

2

Q4 ’18 YoY QoQ

Total Growth NM 332%

Units NM 137%

Inventory NM 23%


U.S.


• Over 150,000 patient starts since launch

• Confident in our product profile and

first-mover advantage with majority TRx

share exiting 2018

– Two competitors approved in the U.S.

• Paid prescriptions increased to ~ 50% in

Q4 vs. ~ 35% in Q3

• Q4 sales benefited from $20M prior

period accounting estimates

Aimovig® is developed in collaboration with Novartis

EXECUTIVE VICE PRESIDENT, RESEARCH AND DEVELOPMENT

DAVID M. REESE, M.D.

R&D REVIEW

29




Oncology• AMG 420 (BCMA BiTE®) and AMG 330 (CD33 BiTE®)

– First-in-human data presented at 2018 ASH Annual Meeting

• KYPROLIS®

– Data from Phase 3 study (CANDOR) of KYPROLIS® and dexamethasone (Kd) + Darzalex®

vs. Kd in relapsed or refractory multiple myeloma expected in 2019

• BLINCYTO®

– Approved in Europe for the treatment of adults with Ph– CD19-positive B-precursor ALL in first

or second complete remission with minimal residual disease

• Nplate®

– Approved in U.S. for the treatment of pediatric patients with immune thrombocytopenia (ITP)

– Submitted sBLA for treatment of adults with ITP for 12 months or less and an insufficient

response to corticosteroids, immunoglobulins or splenectomy

Q4 ’18 R&D UPDATE

BCMA = B-cell maturation antigen; BiTE® = bispecific T-cell engager; ASH = American Society of Hematology; Ph– = Philadelphia chromosome-negative; ALL = acute lymphoblastic leukemia;

sBLA = supplemental Biologics License Application

30




Multiple Myeloma Leukemia/Lymphoma Solid Tumors

KYPROLIS® proteasome

inhibitorBLINCYTO® CD19 BiTE®

ALL

NHL

IMLYGIC® oncolytic virus Melanoma

AMG 420 BCMA BiTE® AMG 562 CD19 HLE-BiTE® AMG 509* prostate bispecific

Ab (XmAb®)Prostate

AMG 701 BCMA HLE-BiTE® AMG 330 CD33 BiTE®

AML

AMG 160* PSMA HLE-BiTE®

AMG 424 CD38 bispecific Ab

(XmAb®)AMG 673 CD33 HLE-BiTE®

AMG 757 DLL3 HLE-BiTE®Small Cell

Lung CancerAMG 176 MCL-1 inhibitor (iv) AMG 427 FLT3 HLE-BiTE® AMG 119 DLL3 CAR-T

AMG 397 MCL-1 inhibitor (oral) AMG 553* FLT3 CAR-T AMG 510 KRAS G12C inhibitor Solid Tumors

AMG 176 MCL-1 inhibitor (iv) AMG 199* HLE-BiTE®

GastricAMG 397 MCL-1 inhibitor (oral) AMG 910* HLE-BiTE®

AMG 596 EGFRviii BiTE® Glioblastoma

Bispecific

Small Molecule/Other

DATA EXPECTED FROM MANY NOVEL, HIGH-POTENTIAL ONCOLOGY PROGRAMS

Data expected 2019

Data possible 2019

*Not yet enrolling patients; HLE = half-life extended; Ab = antibody; Mcl-1 = myeloid cell leukemia-1; iv = intravenous; FLT3 = fms-like tyrosine kinase 3; CAR-T = chimeric antigen receptor enhanced T cells;

NHL = non-Hodgkin’s lymphoma; AML = acute myeloid leukemia; PSMA = prostate-specific membrane antigen; DLL3 = delta-like 3; EGFR viii = epithelial growth factor receptor variant iii

31




Cardiovascular/Metabolic• Repatha®

– Indication in China expanded to reduce the risk of myocardial infarction, stroke and coronary

revascularization for adults with established atherosclerotic cardiovascular disease

• AMG 890―lipoprotein(a) siRNA

– Phase 1 data expected late 2019/early 2020

Bone• EVENITY™

– Approved in Japan for the treatment of osteoporosis in men and postmenopausal women at

high risk of fracture

– FDA Advisory Committee voted in favor of approval for the treatment of postmenopausal women with osteoporosis at high risk for fracture

Q4 ’18 R&D UPDATE

siRNA = short interfering ribonucleic acid; EVENITY™ is developed in collaboration with UCB globally, as well as our joint venture partner Astellas in Japan

32




Biosimilars

• ABP 710 (biosimilar infliximab)

– Regulatory submissions completed in U.S. and EU in December 2018 and January 2019,

respectively

• KANJINTI™ (biosimilar trastuzumab)

– Biologics License Application was resubmitted to the FDA in December 2018

• ABP 798 (biosimilar rituximab)

– Phase 3 study in rheumatoid arthritis met primary and secondary endpoints

– Phase 3 data in non-Hodgkin’s lymphoma expected 2019

• ABP 959 (biosimilar eculizumab)

– Phase 3 study in paroxysmal nocturnal hemoglobinuria screening patients

Q4 ’18 R&D UPDATE

33




• We met and exceeded each of our 2018 financial commitments

• Our transformation over the past five years positions us well to deliver

important medicines for patients and long-term growth for shareholders

• Our newer products are demonstrating momentum

• Our R&D organization is delivering differentiated, first-in-class programs

• With a strong balance sheet and sustained cash flows, we are in a strong

position to provide attractive returns to our shareholders

INVESTING FOR LONG-TERM GROWTH

JANUARY 29, 2019


RECONCILIATIONS

36




Amgen Inc.

Consolidated Statements of Income - GAAP

(In millions, except per-share data)

(Unaudited)

2018 2017 2018 2017

Revenues:

Product sales.............................................................................................................… 6,001$ 5,569$ 22,533$ 21,795$

Other revenues.......................................................................................................... 229 233 1,214 1,054

Total revenues............................................................................................ 6,230 5,802 23,747 22,849

Operating expenses:

Cost of sales………………………………………………...…………………… 1,096 1,059 4,101 4,069

Research and development............................................................................... 1,182 1,043 3,737 3,562

Selling, general and administrative............................................................................... 1,559 1,427 5,332 4,870

Other…….........................................................................………………. 11 28 314 375

Total operating expenses.................................................................................… 3,848 3,557 13,484 12,876

Operating income........................................................................................ 2,382 2,245 10,263 9,973

Interest expense, net...............................................................................................… 352 332 1,392 1,304

Interest and other income, net...............................................................................................…155 301 674 928

Income before income taxes..................................................................................................... 2,185 2,214 9,545 9,597

Provision for income taxes.....................................................................................… 257 6,478 1,151 7,618

Net income (loss)................................................................................................................ 1,928$ (4,264)$ 8,394$ 1,979$

Earnings (loss) per share:

Basic......................................................................................................................... 3.04$ (5.89)$ 12.70$ 2.71$

Diluted................................................................................................................. 3.01$ (5.89)$ 12.62$ 2.69$

Weighted-average shares used in calculation of earnings (loss) per share:

Basic......................................................................................................................... 635 724 661 731

Diluted................................................................................................................. 640 724 665 735

Three months ended Years ended

December 31, December 31,

37




Amgen Inc.

Consolidated Balance Sheets - GAAP

(In millions)

2018 2017

(Unaudited)

Assets

Current assets:

Cash, cash equivalents and marketable securities........................................................................................................................................................................…......................................................................... 29,304$ 41,678$

Trade receivables, net........................................................................................................................................................…............................................................................ 3,580 3,237

Inventories................................................................................................................................................................…....................................................................................................................... 2,940 2,834

Other current assets....................................................................................................................................................................…..............................................................................… 1,794 1,727

Total current assets......................................................................................................................................................... 37,618 49,476

Property, plant and equipment, net................................................................................................................................................…........................................................................... 4,958 4,989

Intangible assets, net......................................................................................................................................….................................................................................................................… 7,443 8,609

Goodwill........................................................................................................................................................................…...............................................................................… 14,699 14,761

Other assets................................................................................................................................................................…..............................................................................................................................… 1,698 2,119

Total assets........................................................................................................................................................…................................................................................................................. 66,416$ 79,954$

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable and accrued liabilities............................................................................................................................................................... 9,069$ 7,868$

Current portion of long-term debt................................................................................................................................................................................................. 4,419 1,152

Total current liabilities.......................................................................................................................................….......................................................................................... 13,488 9,020

Long-term debt...........................................................................................................................................................…..................................................................................… 29,510 34,190

Long-term deferred tax liabilities........................................................................................................... 864 1,166

Long-term tax liabilities............................................................................................................. 8,770 9,099

Other noncurrent liabilities.......................................................................................................................................................…...................................................................…. 1,284 1,238

Stockholders' equity.................................................................................................................................................…...............................................................................................................… 12,500 25,241

Total liabilities and stockholders' equity................................................................................................................................…........................................................................................ 66,416$ 79,954$

Shares outstanding......................................................................................................................................................................…...................................................................... 630 722

December 31,

38




Amgen Inc.

GAAP to Non-GAAP Reconciliations

(Dollars in millions)

(Unaudited)

2018 2017 2018 2017

GAAP cost of sales 1,096$ 1,059$ 4,101$ 4,069$

Adjustments to cost of sales:

Acquisition-related expenses (a) (276) (243) (1,099) (1,126)

Certain net charges pursuant to our restructuring initiative (1) - (1) -

Total adjustments to cost of sales (277) (243) (1,100) (1,126)

Non-GAAP cost of sales 819$ 816$ 3,001$ 2,943$

GAAP cost of sales as a percentage of product sales 18.3% 19.0% 18.2% 18.7%

Acquisition-related expenses (a) -4.7 -4.3 -4.9 -5.2

Certain net charges pursuant to our restructuring initiative 0.0 0.0 0.0 0.0

Non-GAAP cost of sales as a percentage of product sales 13.6% 14.7% 13.3% 13.5%

GAAP research and development expenses 1,182$ 1,043$ 3,737$ 3,562$

Adjustments to research and development expenses:

Acquisition-related expenses (a) (19) (20) (78) (77)

Certain net charges pursuant to our restructuring initiative (1) 2 (2) (3)

Total adjustments to research and development expenses (20) (18) (80) (80)

Non-GAAP research and development expenses 1,162$ 1,025$ 3,657$ 3,482$

GAAP research and development expenses as a percentage of product sales 19.7% 18.7% 16.6% 16.3%


Certain net charges pursuant to our restructuring initiative 0.0 0.0 0.0 0.0

Non-GAAP research and development expenses as a percentage of product sales 19.4% 18.4% 16.2% 16.0%

GAAP selling, general and administrative expenses 1,559$ 1,427$ 5,332$ 4,870$

Adjustments to selling, general and administrative expenses:

Acquisition-related expenses (a) (19) (20) (84) (99)

Certain net charges pursuant to our restructuring initiative (8) (1) (16) (2)

Other - - - (3)

Total adjustments to selling, general and administrative expenses (27) (21) (100) (104)

Non-GAAP selling, general and administrative expenses 1,532$ 1,406$ 5,232$ 4,766$

GAAP selling, general and administrative expenses as a percentage of product sales 26.0% 25.6% 23.7% 22.3%


Certain net charges pursuant to our restructuring initiative -0.2 0.0 -0.1 0.0

Other 0.0 0.0 0.0 0.0

Non-GAAP selling, general and administrative expenses as a percentage of product sales 25.5% 25.2% 23.2% 21.9%

GAAP operating expenses 3,848$ 3,557$ 13,484$ 12,876$

Adjustments to operating expenses:

Adjustments to cost of sales (277) (243) (1,100) (1,126)

Adjustments to research and development expenses (20) (18) (80) (80)

Adjustments to selling, general and administrative expenses (27) (21) (100) (104)

Certain net charges pursuant to our restructuring initiative (b) (1) (27) 7 (83)

Certain other expenses - - (25) -

Acquisition-related adjustments (c) (10) (1) (296) (292)

Total adjustments to operating expenses (335) (310) (1,594) (1,685)

Non-GAAP operating expenses 3,513$ 3,247$ 11,890$ 11,191$

GAAP operating income 2,382$ 2,245$ 10,263$ 9,973$

Adjustments to operating expenses 335 310 1,594 1,685

Non-GAAP operating income 2,717$ 2,555$ 11,857$ 11,658$

GAAP operating income as a percentage of product sales 39.7% 40.3% 45.5% 45.8%

Adjustments to cost of sales 4.7 4.3 4.9 5.2

Adjustments to research and development expenses 0.3 0.3 0.4 0.3

Adjustments to selling, general and administrative expenses 0.5 0.4 0.5 0.4

Certain net charges pursuant to our restructuring initiative (b) 0.0 0.6 0.0 0.4

Certain other expenses 0.0 0.0 0.0 0.0

Acquisition-related adjustments (c) 0.1 0.0 1.3 1.4

Non-GAAP operating income as a percentage of product sales 45.3% 45.9% 52.6% 53.5%

GAAP interest and other income, net 155$ 301$ 674$ 928$

Adjustments to other income (d) - - (68) -

Non-GAAP interest and other income, net 155$ 301$ 606$ 928$

GAAP income before income taxes 2,185$ 2,214$ 9,545$ 9,597$

Adjustments to operating expenses 335 310 1,594 1,685

Adjustments to other income (d) - - (68) -

Non-GAAP income before income taxes 2,520$ 2,524$ 11,071$ 11,282$

GAAP provision for income taxes 257$ 6,478$ 1,151$ 7,618$

Adjustments to provision for income taxes:

Income tax effect of the above adjustments (e) 77 98 362 538

Other income tax adjustments (f) - (6,156) (15) (6,120)

Total adjustments to provision for income taxes 77 (6,058) 347 (5,582)

Non-GAAP provision for income taxes 334$ 420$ 1,498$ 2,036$

GAAP tax as a percentage of income before taxes 11.8% 292.6% 12.1% 79.4%

Adjustments to provision for income taxes:

Income tax effect of the above adjustments (e) 1.5 -32.1 1.6 -7.1

Other income tax adjustments (f) 0.0 -243.9 -0.2 -54.3

Total adjustments to provision for income taxes 1.5 -276.0 1.4 -61.4

Non-GAAP tax as a percentage of income before taxes 13.3% 16.6% 13.5% 18.0%

GAAP net income (loss) 1,928$ (4,264)$ 8,394$ 1,979$

Adjustments to net income (loss):

Adjustments to income before income taxes, net of the income tax effect 258 212 1,164 1,147

Other income tax adjustments (f) - 6,156 15 6,120

Total adjustments to net income (loss) 258 6,368 1,179 7,267

Non-GAAP net income 2,186$ 2,104$ 9,573$ 9,246$



39




Amgen Inc.



(Unaudited)

The following table presents the computations for GAAP and non-GAAP diluted earnings (loss) per share.

GAAP Non-GAAP GAAP Non-GAAP

Net income (loss)………………………………………………………..………………………………………………………………………………………………………………………………………………………………………………………………….1,928$ 2,186$ (4,264)$ 2,104$

Shares

Weight-average shares for basic EPS 635 635 724 724

Effect of dilutive securities 5 5 - 5

Weighted-average shares for diluted EPS……………………………………………...………………………………………………………………………………………………………………..640 640 724 729

Diluted earnings (loss) per share (g)……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………3.01$ 3.42$ (5.89)$ 2.89$

GAAP Non-GAAP GAAP Non-GAAP

Net income………………………………………………………..………………………………………………………………………………………………………………………………………………………………………………………8,394$ 9,573$ 1,979$ 9,246$

Shares

Weight-average shares for basic EPS 661 661 731 731

Effect of dilutive securities 4 4 4 4

Weighted-average shares for diluted EPS……………………………………………...………………………………………………………………………………………………………………..665 665 735 735

Diluted earnings per share……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………12.62$ 14.40$ 2.69$ 12.58$

(a)

(b)

(c)

(d)

(e)

(f)

(g)

December 31, 2018 December 31, 2017

Year ended Year ended

Three months ended Three months ended

The tax effect of the adjustments between our GAAP and non-GAAP results takes into account the tax treatment and related tax rate(s) that apply to each adjustment in the applicable

tax jurisdiction(s). Generally, this results in a tax impact at the U.S. marginal tax rate for certain adjustments, including the majority of amortization of intangible assets, whereas the tax

impact of other adjustments, including restructuring expense, depends on whether the amounts are deductible in the respective tax jurisdictions and the applicable tax rate(s) in those

jurisdictions. Due to these factors, the effective tax rates for the adjustments to our GAAP income before income taxes, for the three months and year ended December 31, 2018,

were 23.0% and 23.7%, compared with 31.6% and 31.9% for the corresponding periods of the prior year.

For the three months and year ended December 31, 2017, the adjustments related primarily to the impact of U.S. Corporate tax reform, including the repatriation tax on accumulated

foreign earnings and the remeasurement of certain net deferred and other tax liabilities.

During periods of net loss, diluted loss per share is equal to basic loss per share because the antidilutive effect of potential common shares is disregarded.

December 31, 2018 December 31, 2017

The adjustments related primarily to noncash amortization of intangible assets acquired in business combinations.

For the three months and year ended December 31, 2017, the adjustments related primarily to severance expenses associated with our restructuring initiative.

For the years ended December 31, 2018 and 2017, the adjustments related primarily to impairments of intangible assets acquired in business combinations.

For the year ended December 31, 2018, the adjustment related to the net gain associated with the Kirin-Amgen share acquisition.

40




Amgen Inc.



(Unaudited)

2016 2015 2014 2013

GAAP operating income 9,794$ 8,470$ 6,191$ 5,867$

Adjustments to operating expenses:

Acquisition-related expenses (a) 1,510 1,377 1,546 986

Certain net charges pursuant to our restructuring and other cost savings initiatives (b) 37 114 596 71

Expense (benefit) related to various legal proceedings 105 91 (3) 14

Expense resulting from clarified guidance on branded prescription drug fee (c) - - 129 -

Stock option expense - - 16 34

Total adjustments to operating income 1,652 1,582 2,284 1,105

Non-GAAP operating income 11,446$ 10,052$ 8,475$ 6,972$

Product sales 18,192$

GAAP operating margin 32.3%

Impact of total adjustments to operating income 6.0%

Non-GAAP operating margin 38.3%

GAAP net income 7,722$ 6,939$ 5,158$ 5,081$

Adjustments to net income:

Adjustments to operating expenses 1,652 1,582 2,284 1,105

Adjustments to other income (d) - - - 34

Income tax effect of the above adjustments (e) (525) (496) (717) (376)

Other income tax adjustments (f) (64) (71) (25) (30)

Non-GAAP net income 8,785$ 7,954$ 6,700$ 5,814$

Weighted-average shares for GAAP diluted EPS 754 766 770 765

Weighted-average shares for Non-GAAP diluted EPS* 754 766 770 765

GAAP diluted EPS 10.24$ 9.06$ 6.70$ 6.64$

Non-GAAP diluted EPS 11.65$ 10.38$ 8.70$ 7.60$

* Dilutive securities used to compute Non-GAAP diluted EPS for the year ended December 31, 2013 were computed under the treasury stock method assuming that we do not expense stock options.

(a)

(b)

(c)

(d)

(e)

(f)

Years Ended December 31,

The tax effect of the adjustments between our GAAP and non-GAAP results takes into account the tax treatment and related tax rate(s) that apply to each adjustment in the applicable tax

jurisdiction(s). Generally, this results in a tax impact at the U.S. marginal tax rate for certain adjustments, including the majority of amortization of intangible assets, whereas the tax impact of

other adjustments, including restructuring expense, depends on whether the amounts are deductible in the respective tax jurisdictions and the applicable tax rate(s) in those jurisdictions.

The adjustments related to certain acquisition items and prior-period items excluded from GAAP earnings.

The adjustments related primarily to noncash amortization of intangible assets acquired in business combinations. For the years ended December 31, 2014 and 2013, the adjustments included

changes in the estimated fair values of contingent consideration obligations related to prior-year business combinations.

The adjustments related to headcount charges, such as severance, and to asset charges, such as asset impairments, accelerated depreciation and other charges related to the closure of our

facilities.

The adjustment related to the recognition of an additional year of the nontax deductible branded prescription drug fee, as required by final regulations issued by the Internal Revenue Service.

The adjustment related to bridge financing costs associated with the Onyx business combination and noncash interest expense associated with our convertible notes.

41




Amgen Inc.

Reconciliations of Cash Flows

(In millions)

(Unaudited)

2018 2017 2018 2017

Net cash provided by operating activities............................................................................................3,194$ 3,012$ 11,296$ 11,177$

Net cash (used in) provided by investing activities ............................................................................................(4,637) (78)$ 14,339 (4,024)$

Net cash used in financing activities............................................................................................(3,568) (2,134)$ (22,490) (6,594)$

(Decrease) increase in cash and cash equivalents............................................................................................(5,011) 800 3,145 559

Cash and cash equivalents at beginning of period............................................................................................11,956 3,000$ 3,800 3,241$

Cash and cash equivalents at end of period............................................................................................6,945$ 3,800$ 6,945$ 3,800$

2018 2017 2018 2017

Net cash provided by operating activities............................................................................................3,194$ 3,012$ 11,296$ 11,177$

Capital expenditures............................................................................................(225) (153)$ (738) (664)$

Free cash flow............................................................................................2,969$ 2,859$ 10,558$ 10,513$





42




Reconciliation of GAAP EPS Guidance to Non-GAAP

EPS Guidance for the Year Ending December 31, 2019

(Unaudited)

GAAP diluted EPS guidance.............................................................................................…………………….. .. 11.55$ - 12.75$

Known adjustment to arrive at non-GAAP*:

Acquisition-related expenses (a)................................................................................... 1.55

Non-GAAP diluted EPS guidance ....................................................................................................................................................................… .. 13.10$ - 14.30$

* The known adjustments are presented net of their related tax impact, which amount to approximately $0.43 per share.

(a) The adjustments relate primarily to non-cash amortization of intangible assets acquired in business combinations.

Our GAAP diluted EPS guidance does not include the effect of GAAP adjustments triggered by events that may

occur subsequent to this press release such as acquisitions, asset impairments, litigation and changes in the fair value

of our contingent consideration.

Reconciliation of GAAP Tax Rate Guidance to Non-GAAP

Tax Rate Guidance for the Year Ending December 31, 2019

(Unaudited)

GAAP tax rate guidance...........................................................................................................…............................................................. 12.5% - 13.5%

Tax rate effect of known adjustments discussed above..................................................................................................…............................................................. 1.5%

Non-GAAP tax rate guidance ....................................................................................................................................................................… 14.0% - 15.0%

43




Amgen Inc.

International Sales Performance Adjusted for Foreign Exchange

Amgen has presented international sales performance excluding the impact of foreign exchange. This measure adjusts

for the translation effect of changes in average foreign exchange rates between the current period and the

corresponding period in the prior year. Amgen’s calculation to adjust for the impact of foreign exchange results in prior

period weighted-average, foreign exchange rates being applied to current period product sales. Amgen believes that

excluding the impact of foreign exchange enhances an investor’s overall understanding of the financial performance and

prospects for the future of Amgen’s core business activities by facilitating comparisons of results of core business

operations among current, past and future periods.

JANUARY 29, 2019


q4 ’18 earnings all

Documents